the free play of economic forces and the wise judgment of the builders of our prosperity. No city can afford to place its trade, which is its life, on a false basis. When the commerce naturally tributary to it is handicapped by poor terminals, or overloaded with too heavy charges on account of the excessive cost of enlargement, it will go elsewhere. There are a dozen places between the Maine coast and Norfolk that could be made available for relief. A city can never grow great enough to defy safely the demands of the laws of trade and its proper accommodation. Should the decentralization plan be forced on traffic, some of our greatest cities would not merely forfeit their natural share in national growth, but they would surely decline in business, wealth and power.

Interest in this question should be not local only, but national. A railroad terminal performs the same function as a harbor. It is actually the largest and most valuable harbor used by the nation’s commerce. Probably no greater volume of rail and water traffic is transferred in any city anywhere than in Duluth-Superior. On the land side almost the whole of this is carried by three railroads. It is received, transferred and discharged without congestion in the busiest seasons and with expedition because the terminals there have been specially created for the work they have to do. The nation has properly made the provision of adequate harbors its care, and expended millions of dollars on our seaboards and the Great Lakes to ensure ample facilities for loading and unloading cargoes. It is not to be supposed or desired that the nation should furnish the money to provide those great harbors known as railroad terminals, although they are vastly more essential to the free movement of trade. But it should smooth the way and make easy the task of those whose business it is to provide them.

When traffic is blocked and the railroad yards of the principal cities are filled with cars that cannot be moved, the railroad suffers the loss of a portion of its earnings; but the business man loses a larger share of his trade, and the workingman his employment. No industry can do more than protract a starved existence when the currents of transportation cease moving freely. When the commerce of an industrial empire whose magnitude is partly indicated by the clearing house exchanges of $102,000,000,000 in New York City alone during the past year is blocked, the whole nation suffers.

Whenever we have a big crop or a general revival of business, the country hears most of the danger of a car shortage. The public assumes that if enough cars are provided they can be moved on schedule time from point of origin to destination, wherever these may be. This is not the real trouble. What is really needed is the greater movement of cars. The average movement of a freight car is about 24 miles, or two hours, per day. Delays in loading and unloading by shippers are partly responsible, but much of the lost time is consumed in getting into, out of or through terminal points where there is not room to handle the cars. More cars intensify instead of reducing the trouble. No other business could endure the loss of the use of its machine plant for twenty-two hours out of the twenty-four. One thousand cars will cover nearly eight miles of track. Each car must be switched, loaded or unloaded, or all three. This multiplies the trackage requirement.

A thousand cars are a fleabite compared with the daily movement in the busy season. The railroads of the United States carried 1,849,900,101 tons of revenue freight in 1910. At the average load of 21.5 tons per car, it would take 86,041,865 cars to move it. Nearly all of these pass through some large terminal, most of them several times in the year. There are about thirty important traffic centers; and if the total movement were divided equally between them, supposing each car to pass through but one market, and that only once a year, 7,858 cars would have to pass through each terminal every day in the year. Five thousand cars a day are enough to create a blockade in many of the large terminals of the country. Our worst troubles have come not from insufficient rolling stock or lack of efficiency in handling it, but from congested terminals. Water routes give little assistance: first, because the largest streams of traffic in the United States are not in a direction where either natural or artificial waterways can be used; second, because a waterway less than twenty feet deep cannot compete as a carrier. The waterway, too, may and often does increase rather than lessen the pressure on terminal facilities. There is but one possible remedy—enlarged terminals. The main question back of that is financial. Where and on what terms is the money to be had for an improvement become as necessary as the removal of a freight wreck from a main traffic line.

The two obstacles to be overcome in this readjustment of the transportation agency to the growing needs of the country are the physical difficulty and the cost. The railroads could not have foreseen and guarded against this need thirty or forty years ago. They could not then know where the greatest markets were to grow. They could not tell in what portion of any city it would be most convenient to have railroad yards placed a generation later. If they had secured land, changes in business districts would in many cases have made their forethought useless. Even if gifted with prophetic knowledge, they could not then have commanded the resources for such an undertaking, any more than the country town of today can put in all the improvements that its future as a city will require and justify. It is a natural and inevitable condition that we face. Upon the railroads rests the responsibility of performing the work now to be done. Will they be left free to attempt it under such conditions as will make the performance of it a feasible thing and not a miracle?

In some places it will be physically impossible to secure the land area for proper terminals. The space that must be used is generally in or near the business heart of the city; often along the waterways, where enterprise has been busy and land values have reached their highest point. Therefore the space for such terminals is either not available on any terms or will cost sums that sound fabulous. The financing of new terminals presents a far more serious problem than the financing of a new railroad. Large sums of money must be raised. The owners of capital will not supply them unless they are satisfied with the security and with the prospect for a sure and adequate return on their money.

What security can the railroads offer for such a loan? Already, merely for constructing and operating their existing machine, many of them have not only pledged their credit to the limit but have absorbed a large share of their surplus earnings that in other countries would have been paid out in dividends. The ability of the Pennsylvania system to handle its big business is due in no small degree to its past policy of diverting profits legally the property of the stockholders to the construction of betterments. There is not a well-managed railway of any size in the country of which the same is not true to some extent. And, with the increase of their expenses and the limitation of their income by public authority, there is coming to be little or no surplus revenue that may be so employed. Net income, not gross, is the index of prosperity and the foundation of credit. Gross revenues grow, but expense grows faster. Returns to the Bureau of Railway Economics, covering 90 per cent of all the steam railway mileage in the United States, show that during the first seven months of 1912 operating revenues increased 3.3 per cent per mile as compared with the same period in 1911, operating